Apr 06, 2026 Hilton Head Finance &amp; Administrative Committee

OUR MARCH 9TH, 2026 MEETING.

SECOND.

ALL IN FAVOR? WE HAVE OUR MINUTES OF

[3. Approval of the Minutes]

I MAKE A MOTION TO APPROVE THE MINUTES.

I THINK YOU CAN, MR. ALFRED.

[4.a. Town of Hilton Head Island FY2026 Monthly Financial Update – Dave Byrd, Finance Director]

OUR FINANCE DIRECTOR, MR. DAVE BYRD.

GIVE US A PRESENTATION REGARDS TO OUR FY 26 MONTHLY FINANCIAL UPDATE.

GOOD MORNING AND WELCOME, SIR.

GOOD, GOOD MORNING, CHAIRMAN BROWN AND COMMITTEE MEMBERS.

UM, HOPE YOU HAD A GOOD EASTER HOLIDAY.

UM, I'M GONNA TAKE THIS OFF WAY IT WORKS.

SO JUST A QUICK HIGHLIGHT.

UM, WE'RE GONNA GO PAST THE STAFF REPORT AND KIND OF TALK ABOUT SALES TAX REPORTING.

UM, BACK IN NOVEMBER, I WANT TO SAY IN THE FIRST FINANCE MEETING, UM, Y'ALL KIND OF REQUESTED TO HEAR ABOUT, SEE WHAT YOU COULD GET ON THE HEALTH OF THE TOWN.

AND, UM, THAT I HAD AN IDEA OF REPORTING THAT WE USED TO DO IN OR DO DID IN BRECKENRIDGE, WHICH IS REALLY WHAT, WHAT MONEY IS SPENT ON THIS ISLAND, RIGHT? JUST TO KIND OF SEE BY SECTOR, HOW ARE WE TRACKING? AND, UM, THANKS TO ALL THE WORK OF APRIL AND, UH, KIMBERLY RIGHT HERE, UM, OVER FOUR MONTHS OF INTERPRETATION OF DATA.

UM, YOU KNOW, THIS IS THE RESULT OF THAT EFFORT, UM, WHICH ALSO INCLUDES THE STATE.

WE DON'T GET THIS INFORMATION, UH, REGULARLY FROM THE STATE.

SO WE HAD TO, UM, REVIEW WITH THEM WHAT WE WERE LOOKING FOR, WHICH IS STARTING IN 2023 BY MONTH, HISTORICAL TAX, GROSS SALES TAX INFORMATION OF WHAT'S SPENT ON THIS ISLAND.

UM, A LOT OF EFFORT WAS, WAS DONE ON THAT.

I CAN, COULD, CAN'T THANK THEM MORE.

SO THIS WILL BE A PART OF THE PACKAGE GOING FORWARD.

UM, YOU'LL SEE THAT EVEN THOUGH WE'RE IN APRIL, THIS IS THROUGH THE MONTH OF DECEMBER, AND THAT'S JUST BECAUSE OF THE TIMING OF THE REPORTING AND WHAT WE GET.

SO YOU'LL SEE FINANCIALS THROUGH FEBRUARY, BUT THE SALES TAX INFORMATION WILL BE LAGGING, UM, MAYBE A MONTH OR TWO DEPENDING ON WHEN INFORMATION COMES FROM THE STATE.

BUT WE ARE GETTING IT MONTHLY NOW.

SO THIS SHOULD BE ABLE TO CONTINUE.

AND IT'S JUST ANOTHER THING TO LOOK AT FROM A TREND PERSPECTIVE.

AND THAT'S, YOU KNOW, WE DON'T GET ALL OF THE DOLLARS THAT ARE GENERATED FROM THESE TAXES BECAUSE SOME OF RETAIL AND GROCERY, THEY GO, YOU KNOW, THEY GO TO THE STATE.

BUT SO IT, IT DOESN'T ALL TIE BACK TO OUR FINANCIALS, BUT IT WILL ON ACCOMMODATION AND HOSPITALITY TAXES, WE, WE DO GET THAT SIDE OF IT.

SO, UM, IF WE LOOK AT JUST A HIGH LEVEL VIEW ON OVERALL WE ARE AT A, I'LL CALL STABLE.

YOU KNOW, FROM A TOWN PERSPECTIVE, IF YOU LOOK AT THE TRENDING, AND THIS IS THE YEAR TO DATE THROUGH DECEMBER.

SO JUNE THROUGH DECEMBER, ABOUT HALF THE YEAR FOR 26, UH, GROSS SALES OF 1.5 BILLION OF ALL THE SECTORS COMBINED, WHICH IS JUST A LITTLE BIT OF 0.2%, 0.2 OF 1% GROWTH.

UM, RETAIL'S OUR LARGEST SECTOR, WHICH YOU WOULD PROBABLY IMAGINE THAT WOULD BE THE CASE.

AND CONSTRUCTIONS ARE FASTEST GROWING, NOT OUR LARGEST.

SO THE CHANGE OF CONSTRUCTION WILL LEAD A HIGHER PERCENTAGE GROWTH.

UM, THIS IS A DEFINITION PAGE, WE'LL KEEP IT IN THE PACKET JUST TO HELP EXPLAIN WHAT WE'RE LOOKING AT HERE.

UM, YOU KNOW, I, I THINK THE MAIN THING THAT I WOULD SAY IS AT THE TOP OF THIS, WE HAVE THE, UH, SECTOR CATEGORY FOR TOURISM, RESTAURANT, GROCERY, RETAIL, CONSTRUCTION SERVICES, TELECOM, AND THEN OTHER.

SO, UM, THERE IS IN THE REPORTING DEFINITIONS AT THE BOTTOM, N-A-I-C-A-C-S, THAT'S THE NAS CODE.

I SAY THAT RIGHT? YES.

THERE YOU GO.

THAT'S THE FIRST.

BUT UM, THAT IS THE CODES THAT THE BUSINESSES SUBMIT TO THE STATE.

THAT WE TRIED TO BREAK DOWN INTO THE DIFFERENT SEGMENTS THAT MADE SENSE, UH, FROM A CATEGORY PERSPECTIVE.

SO THERE'S WELL OVER 150

[00:05:02]

UM, AND I WILL SAY THAT THE INFORMATION WE GET IS AS ONLY GOOD AS THE CODE THAT THE BUSINESS CHOOSES WHEN THEY SUBMIT THE RETURN TO THE STATE.

SO, UM, WE, WE, WE DON'T HAVE THE ABILITY TO CHANGE THAT OR THE STATE DOESN'T CHANGE.

THEY JUST ACCEPT IT AS IT IS.

SO THAT'S, THAT'S ONE OF THE THINGS THAT, THAT I THINK FROM A SMELL TEST PERSPECTIVE, IT LOOKS LIKE IT'S WOULD BE PRETTY GOOD FROM THAT.

FROM THAT SIDE OF IT, WE ALSO BROKE OUT THE TAX MATRIX FROM THE STATE SIDE AND THEN FROM A HILTON HEAD SITE JUST TO SHOW WHAT WE GET VERSUS WHAT THE STATE GETS BASED UPON THIS REPORTING.

SO FROM AN OVERALL VIEW PERSPECTIVE, UM, THIS IS, UH, LOOKING AT ONCE AGAIN FULL YEAR 23 FROM A JANUARY THROUGH OR JUNE THROUGH JANUARY PERSPECTIVE, COMPARING 23, 24, 25, AND 26.

SO YOU'VE GOT THE DIFFERENCE SEGMENTS, SEGMENTS THAT ARE LISTED HERE.

UM, AND THEN A GRAPHICAL VIEW OF THE PERCENTAGES OF THOSE, UH, SEGMENTS.

HOW THEY OR SECTORS THAT MAKE UP THE TOTAL, UH, TOTAL AMOUNT OF GROSS SALES TAX.

AND AS YOU CAN SEE, TELECOM IS THE BIGGEST AND FOLLOWED BY, UM, RETAIL.

THEN RESTAURANT TOURISM AND GROCERY ARE ALL RELATIVELY THE SAME.

UM, SO FROM A PERSPECTIVE OF LOOKING AT TRENDING AT A OVERALL YEAR TO DATE, 25 THROUGH 26, YOU KNOW, THESE, THESE ARE, UM, RELATIVELY, WE USE THE WORD STABLE.

UM, THE ONE THING YOU WOULD SEE IS CONSTRUCTION, A 19% GROWTH FROM 25.

THAT'S REALLY BASED UPON CONSTRUCTION ACTIVITY.

UM, THERE'S REALLY, UM, NO ANOMALIES ON THAT ONE THAT'S GROWTH.

ON THE SERVICES SIDE, YOU SEE A REDUCTION OF 9.950 MILLION FROM 25 TO 26.

THERE IS ACTUALLY ONE LANDSCAPER THAT HAS YET TO FILE RETURNS FOR THE, UH, FOURTH QUARTER, FOURTH, FOURTH QUARTER CALENDAR YEAR OF 2025.

AND SO, UM, IT'S ABOUT 3 MILLION A A MONTH THAT THEY WOULD REPORT.

SO PART OF WHAT WE'RE GONNA DO WITH THIS IS HELP THE STATE MAYBE GET THEIR COLLECTIONS AND YOU LOOK AT IT THAT WAY.

AND THEN AT THE BOTTOM WE KIND OF HAVE A, JUST A DESCRIPTION ONCE AGAIN OF WHAT WE'RE LOOKING AT HERE.

IT WAS ON THE DEFINITION PAGE, BUT IF YOU KIND OF LOOK AT TRENDING FROM 25 TO 26, WE'RE ABOUT, UH, 3.4 GROSS SALES OF A MILLION AHEAD OF LAST YEAR, WHICH IS BASICALLY FLAT, WHICH THAT'S WHAT THIS SHOWS GETTING INTO THE, OH, SORRY ABOUT THAT.

CAN WE MAKE COMMENTS ALONG THE WAY? YES, PLEASE.

UH, WELL FIRST OF ALL, I, UH, WANNA THANK YOU FOR PUTTING THIS TOGETHER AND I ESPECIALLY WANNA THANK APRIL AND KIMBERLY, UH, FOR THE EFFORT TO DO THIS.

I THINK THIS IS GREAT INFORMATION AND WE'RE GONNA LEARN A LOT.

UM, I HAD A QUESTION, YOU, UH, MENTIONED THAT A LANDSCAPING COMPANY HAD NOT PUT IN THEIR, UH, DATA.

SO THEY WILL THEY GO BACK IN AND BACK DATE IT WHEN IT, UH, IS IMPLEMENTED OR WE'LL FIND OUT.

ODDS ARE I, I CAN'T SAY WHAT THE STATE WOULD DO WHEN IT HAPPENED.

AND, UH, BRECK, IT ALL HAPPENED THAT MONTH.

IT DID NOT GO BACK.

UH, DO YOU HAVE A COMMENT, APRIL ON THAT? OR KIMBERLY, DO YOU THINK IT'LL GO BACK AND RESTATE TAX DOLLARS TO THE CORRECT MONTH? SO WE WOULD HAVE TO ASK FOR THE REPORTS.

THEY ARE LOOKING, SORRY, COME ON UP.

SORRY.

UM, THE, THE STATE IS LOOKING INTO THAT ONCE I POINTED OUT THAT THERE WAS A LARGE DIS DISCREPANCY AND IT WAS JUST ONE LANDSCAPING COMPANY.

SO THEY ARE LOOKING INTO THAT.

OKAY, GREAT.

AND IF WE ADDED THAT BACK IN, UH, OUR PICTURE WOULD LOOK EVEN BETTER, UH, RIGHT.

THAN IT DOES, UH, RIGHT NOW.

AND UM, I THINK WHEN I LOOKED AT, IT'S THE MOST SURPRISING THING TO ME WAS THE AMOUNT OF, UH, REVENUE FROM TELECOM.

I KNOW, I I DIDN'T EXPECT THAT.

SPECTRUM HARRE AT T VERIZON, WE ARE DEFINITELY PLUGGED IN.

SO GETTING TO THE, UH, NEXT SLIDE HERE, WHICH IS THE, UM, GRAPHICAL VIEW OF THE, I WANNA MAKE SURE I'M LOOKING AT THE, YEAH.

UM, SHADE FOR THE MONTH OF DECEMBER.

SO IF YOU LOOK AT THIS ONE, IT HAS THE MONTHS FOR THE YEAR HERE WITH THE GREEN,

[00:10:01]

AT THE BOTTOM OF THIS, WE DO SHOW THE YEAR TO DATE.

UM, NEXT MONTH WE'LL ADD A SUM OF THE TOTAL YEAR SO YOU CAN KIND OF SEE, WELL, WHAT ARE OUR SALES? BUT IF YOU ADD THESE MONTHS UP, IT'S AROUND 2.8 BILLION.

AND I THINK THAT'S A NUMBER YOU'VE PROBABLY HEARD BEFORE.

SO THAT'S ANOTHER SMELL TEST THAT WE'RE GETTING ALL THE TAX INFORMATION.

THIS JUST HELPS BREAK IT OUT.

AND THIS KIND OF FLOWS WITH THE SEASONALITY, I WOULD SAY, THAT WE SAW WITH THE CHAMBER OF WHEN FOLKS COME HERE, WHICH YOU WOULD EXPECT AS WELL.

NOW WE'RE MOVING FORWARD TO TOURISM.

SO THE TOURISM SECTORS OUR NEXT SLIDE HERE AND, YOU KNOW, WE ARE, UH, YOU KNOW, ONE WOULD SAY, OKAY, IF I LOOK AT THIS, WE'RE KIND OF UP AND DOWN FROM A TREND PERSPECTIVE VERSUS 2025.

UM, AND IF YOU LOOK AT THE DEFINITION AT THE BOTTOM, IT INCLUDES HOTEL, UH, TRAVEL, ENTERTAINMENT PRIMARILY, PRIMARILY SERVING VISITORS.

THAT'S WHAT WE DID TO COME UP WITH TOURISM.

WE, ONE THING YOU WOULD SEE IS WE'RE DOWN 7% IN THE MONTH OF DECEMBER FROM LAST YEAR.

UM, ALSO DOWN 5% IN THE MONTH OF OCTOBER FROM LAST YEAR.

BUT THEN NOVEMBER WE WERE UP EIGHT, WE'RE GONNA HAVE THIS VARIABILITY.

I'D SEE, SAY IF WE SAW MULTIPLE MONTHS DOWN, THAT'S SOMETHING WE WOULD REALLY BE LOOKING AT.

HOWEVER, WHEN WE LOOK AT OUR FINANCIALS THROUGH FEBRUARY FOR THE DOLLARS THAT ARE GENERATED IN THIS SPEND, WE'RE OKAY.

SO ONE WOULD THINK WHEN WE SEE FUTURE MONTHS OF THIS ACTIVITY, IT'S PROBABLY GONNA BE OFFSETTING THE REDUCTION OF DECEMBER, IF THAT MAKES SENSE.

UM, BUT OVERALL, UH, RELATIVELY YEAR TO DATE PERSPECTIVE, 2.4% GROWTH, UH, FROM JULY THROUGH DECEMBER, LOOKING AT RESTAURANT, UM, AS WELL, UH, IT'S, IT'S, IT KINDA HOLDS ITS OWN YEAR TO DATE.

WE'RE, UH, 0.8% REDUCTION FROM A YEAR TO YEAR AGO, BUT RELATIVELY FLAT FROM THAT PERSPECTIVE.

AND WE'RE SEEING THAT WITH OUR HOSPITALITY TAX AS WELL.

SO I DON'T THINK THERE'S ANYTHING ALARMING HERE.

WE'RE ABLE TO, UM, CONTINUE TO DRIVE, UH, THAT TAXABLE REVENUE IN THAT CATEGORY.

UM, AND THEN MOVING INTO GROCERY, UH, GROCERY IS ACTUALLY DOWN, UM, FROM A YEAR TO DATE PERSPECTIVE, 3.2%.

UM, AND AS THE NOTES HERE, IT'S PRIMARILY AT LIQUOR STORES AND CONVENIENCE STORES, GROCERY STORES ARE DOING OKAY.

UH, AND IF YOU KIND OF LOOK AT THE, UM, MAYBE IT WASN'T HERE, IT MIGHT'VE BEEN OUR PRIOR, BUT WE'VE GOT THREE NEW STORES COMING ONLINE THIS YEAR.

IT IS, IT IS UP THERE.

I CAN'T SEE.

UM, MAYBE IF I TOOK MY GLASSES OFF, I COULD SEE THE SCREEN.

BUT, UM, UH, WE DO HAVE THREE NEW STORES COMING ONLINE, WHICH WILL CONTINUE TO SHOW THE, THE INVESTMENT BEING MADE IN THE GROCERY CATEGORY.

LOOKING INTO, WE'RE LOOKING AT THAT.

ON RETAIL, THIS IS TOTAL RETAIL.

SO THIS IS RETAIL PURCHASED LOCALLY ON THE ISLAND, BUT IT ALSO WOULD INCLUDE ANY PURCHASES IN THE MAIL THAT YOU WOULD MAKE TO BE DELIVERED TO YOUR HOUSE.

AND THOSE BUSINESSES NEED TO BE CHARGING TAX FOR THAT SERVICE.

UM, THAT IS SOMETHING I WANT TO LOOK INTO FROM A, I DON'T KNOW IF THE STATE'S REALLY AUDITING THAT.

UM, BUT THIS WAS UPSIDE FOR THE TOWN 'CAUSE A LOT OF BUSINESSES, UM, WHEN, AT LEAST WHEN I WAS IN BRE, HAVE NOT CHARGED THIS IN THE PAST.

SO IT'S SOMETHING I THINK WE SHOULD LOOK AT.

BUT FROM A TOTAL RETAIL PERSPECTIVE, WE ARE TRENDING DOWN.

WE'VE HAD THREE OF THE LAST FOUR MONTHS ARE DOWN.

AND, UM, SO I WOULD SAY THIS WOULD BE ONE TO KIND OF KEEP AN EYE ON FROM A SPEND PERSPECTIVE ON THE ISLAND.

BUT IT'S HARD TO SAY WHICH ONES ARE MAIL VERSUS BRICK AND MORTAR FROM A RETAIL SIDE AT THIS POINT.

AND THEN CONSTRUCTION AS MENTIONED.

CONSTRUCTION JUST, YES, SIR.

UH, JUST A THOUGHT ON THE RETAIL.

UM, NOW THAT WE ARE GATHERING THIS DATA AND WE ALSO HAVE AN INVENTORY OF BUILDINGS THAT ARE CURRENTLY VACANT AND THE TIME THAT THEY HAVE BEEN VACANT, I THINK AT SOME POINT WE CAN SORT OF CORRELATE THIS.

I APPRECIATE WHERE YOU'RE GOING AS FAR AS THE ONLINE TREND OF PEOPLE PURCHASING, BUT I ALSO WANNA UNDERSTAND A LITTLE BIT BETTER WHEN FOLKS LEAVE RIGHT.

HILTON HEAD, IF THEY'RE GOING SOMEONE ELSE, WHATEVER THE CASE MAY BE FOR THEM CLOSING THEIR DOORS ON HILTON HEAD AND HOW THAT RELATES TO THE DOWNTURN.

I THINK THAT RIGHT.

WILL HELP US.

YEP.

AND IF, I DON'T KNOW IF WE CAN, BUT IF WE CAN BREAK OUT LOCAL VERSUS MAIL, I DON'T KNOW IF THAT'S, WE'RE, WE'RE

[00:15:01]

SO WE'LL SEE WHAT WE CAN GET ON THAT TO KIND OF SHOW, 'CAUSE YOU'RE, WHAT YOU'RE SAYING IS MAYBE THE END TOWN IS DRIVING THIS REDUCTION FROM LOCAL BUSINESSES, MAYBE NOT BEING OPEN ANYMORE.

AND JUST TO PIGGYBACK ON WHAT YOU SAID, UM, YOU KNOW, THE COMMENT ABOUT GROCERY, YOU KNOW, THE FIRST THING I WAS THINKING ABOUT WAS, YOU KNOW, WHEN DID WHOLE FOODS CLOSE, BUT THAT WAS IN, UM, AUGUST OF 2024.

AND WHEN YOU LOOK AT THE RESULTS, YOU DON'T REALLY SEE NECESSARILY AN IMPACT.

SO IT'LL BE INTERESTING AS WE ADD AND BRING ON THREE MORE GROCERY STORES.

HOW THIS NUMBER CHANGES.

RIGHT, RIGHT.

AND MY GUESS IS PEOPLE ARE STILL GONNA BUY THEIR GROCERIES.

IT'LL PROBABLY MIGHT, I DON'T KNOW IF WE'LL SEE GROWTH IN THAT OR NOT.

IT'D BE INTERESTING TO SEE.

UM, CONSTRUCTION, UH, THIS WILL BE VARIABLE BASED ON, CAN I GO, EXCUSE ME.

GO BACK JUST A SEC TO THIS.

UM, WHEN WE LOOKED AT, AT, UH, OCCUPANCY, UM, RECOLLECT THAT THE HOTELS WERE UP AND SHORT TERM RENTALS WERE DOWN, PEOPLE WHO GO TO HOTELS DON'T GO TO GROCERY STORES AS MUCH.

AND IF SHORT TERM RENTALS ARE DOWN, THAT THAT MAY BE A GOOD POINT.

THAT THAT'S A GOOD POINT.

YES.

THAT'S A VERY GOOD POINT.

ON CONSTRUCTION.

SO BASICALLY IT HAS A LOT OF VARIABILITY.

ONCE AGAIN, THE DOLLARS ARE RELATIVELY SMALL, SO WHEN THERE'S GROWTH, IT DRIVES A HIGHER PERCENTAGE.

UM, BUT WE'RE, WE'RE 18% HIGHER THAN A YEAR AGO AT THIS TIME.

UM, FOR, UH, AND IT'S BASICALLY, UM, YOU KNOW, CONSTRUCTION, REMODELING, SPECIALTY TRADE CONTRACTORS, THOSE TYPES OF BUSINESSES ARE GOING IN THIS SECTOR.

BUT 18 PERCENT'S GOOD, I WOULD SAY BETTER THAN THE OTHER SIDE OF IT.

UM, I, I'M TRYING TO REMEMBER, APRIL, WAS THERE SOMETHING THAT DROVE THE 108%? UM, IN SEPTEMBER? SO WE HAVE, UM, A TAX FILER WHO RENTS INDUSTRIAL MACHINERY THAT REPORTED VERY HIGH INCOME THROUGH FISCAL YEAR 25.

AND THEN THERE IS A SHIFT AROUND THAT TIME PERIOD WHERE THE RESIDENTIAL REMODELERS AND THE SPECIALTY TRADE CONTRACTORS TAKE OVER WITH THE LARGER INCOME REPORTING.

AND THAT MECHANICAL MACHINERY DROPS OFF DRAMATICALLY.

SO THERE'S A SHIFT THAT'S KIND OF INTERESTING, BUT THAT'S REALLY WHAT DRIVES THAT STRANGE VARIABLE THERE.

YOU, YOU CAN STAY UP HERE .

UM, OKAY.

GOING TO, UH, GOING TO THE SERVICES SECTOR, UM, ONCE AGAIN, A LOT OF VARIABILITY HERE ON PERCENTAGE WISE, BUT WE TALKED ABOUT THE LANDSCAPING BUSINESS REALLY CREATING THE LAST THREE MONTHS.

SO IF YOU NORMALIZE THAT OUT, I WOULD SAY IT WOULD BE FLAT FROM A SERVICES SIDE.

UM, AND YOU'VE GOT THE, YOU KNOW, THERE'S ALL SORTS OF DIFFERENT BUSINESSES THAT FALL UNDER THAT CATEGORY.

AND THEN TELECOM, THIS IS THE ONE THAT SURPRISED ME MEAN IT'S A LOT, BUT IT'S, IT'S, UH, IT'S IT'S HOLDING ITS OWN.

YOU WOULD THINK IT WOULD, I GUESS.

'CAUSE THERE'S FOLKS HERE USING THE, UH, TECHNOLOGY.

BUT, UM, AND WE'RE PAYING A LOT.

THAT'S WHAT I WOULD SAY TOO.

BUT, UM, FROM A TAX PERSPECTIVE, IT'S, IT'S GROWING AND, UM, WE DON'T SEE ANY OF THAT.

BUT, UH, IT, IT'S A GOOD SECTOR FOR THE ISLAND.

AND THEN FINALLY, UH, WE GET INTO OTHER, WHICH IS REALLY WHOLESALERS, SUPPLIERS AND MANUFACTURERS THAT DON'T SELL DIRECTLY TO CUSTOMERS, OUR CONSUMERS.

AND, UM, SO IT'S KIND OF ALL OTHER AND, UH, RELATIVELY SMALL DOLLAR AMOUNT, UH, BUT, UH, IS A, UM, 16% GROWTH FROM A YEAR TO DATE PERSPECTIVE.

SO THAT'S A VIEW OF HOW SPENDING IS HAPPENING.

I, I, I THINK IT GIVES A GENERAL OVERVIEW FOR, FOR EVERYONE.

WE'LL CONTINUE TO APPEAL BACK THE ONION AS WE GO THROUGH THIS.

WE CAN NEVER RELEASE ANY NAMES OF BUSINESSES, BUT WE CAN KIND OF TALK ABOUT THINGS FROM A HIGH LEVEL PERSPECTIVE THAT WE WOULD SEE.

UH, ARE THERE ANY QUESTIONS ON THE SALES TAX REPORTING? OKAY, WE'LL PAUSE HERE.

UM, MS. NOT ON SALES TAX? NO.

WELL THANK YOU GUYS FOR THE EFFORT.

UM, I THINK WE WILL, WELL, BEFORE YOU GO AWAY, GO AHEAD.

I THOUGHT, I THOUGHT THEY WERE GONNA HAVE ANOTHER SUB SECTION TO PRESENT, BUT THAT'S IT.

HUH? ON SALES TAX.

ON SALES TAX.

UH, I'LL COME BACK THEN LATER.

UM, THE, THE ONE THING THAT, UH, AND KIM AND APRIL, THANK YOU VERY MUCH.

UM, THE ONE THING THAT SORT OF, UM, HAS ROSE TO A BIT OF CONCERN WAS THE TREND IN OCTOBER ACROSS A FEW SECTORS.

WEEK WITH OUR DMO ABOUT HOW WE MARKET HILTON HEAD.

AND I GUESS JUST REMINISCING ON THE CONVERSATION WE WERE HAVING JUST, I GUESS IT WAS LAST

[00:20:01]

UM, AND THIS IS JUST ONE MAN'S OPINION, BUT OCTOBER IS PROBABLY THE BEST TIME TO VISIT HILTON HEAD .

UM, YOU KNOW, WEATHER'S GREAT.

UH, THE BUGS ARE NOT OUT, THERE'S NOT AS MANY TOURISTS HERE.

UM, SO I JUST WANTED TO PLUG THAT AS WE'RE HAVING THIS CONVERSATION.

I THINK THERE MAY BE OPPORTUNITY THERE.

AND THEN YOU COUPLE THAT WITH, YOU KNOW, OUR RESTAURANTS, UM, YOU KNOW, WHEN WE SEE LABOR DAY, WE SORT OF SAY, OKAY, WE GOTTA WAIT UNTIL EASTER.

RIGHT? AND IT'S, UH, IT'S TOUGH BECAUSE THESE FOLKS ARE TRYING TO MAKE PAYROLL, MAKE RENT, OFFER THE MONEY THAT THEY MADE IN JUNE, JULY, AND AUGUST.

AND NOW HERE'S AN OPPORTUNITY FOR MAYBE A NEW INFLUX OF VISITORS TO HELP US RIGHT.

WITH THAT.

THE LIQUOR STORES, I MEAN, YOU GUYS, CORRECT ME IF I'M WRONG, BUT I THINK A LARGE PER PERCENTAGE OF LIQUOR STORE SALES COMES FROM RESTAURANTS.

THEY BUY FROM LIQUOR STORES, RIGHT? SO IF THEY'RE, IF RESTAURANTS ARE DOWN, LIQUOR STORES ARE GONNA BE DOWN AS WELL, RIGHT? SO I JUST, I THINK THAT'S AN AREA OF, OF FOCUS THAT WE MAY NEED TO SORT OF UNPEEL JUST A LITTLE BIT MORE AS WE MOVE FORWARD.

I APPRECIATE YOUR KNOWLEDGE OF LIQUOR , , UH, I, I'D ALSO SAY IT PROVIDES US AN OPPORTUNITY TO COMPARE THIS DATA TO SOME OF THE ECONOMIC ANALYSIS THAT'S DONE BY OTHER ORGANIZATIONS TO DO, AS YOU SAID, SMELL TEST, UH, THOSE RESULTS AGAINST, UH, THESE THAT WE KNOW ARE, UH, ACCURATE AND FACTUAL.

RIGHT? I AGREE WITH YOU.

AS YOU'LL SEE HERE, SPEAKING OF BEACH, UM, THIS IS THE FUND BALANCE WALK.

THANK YOU, APRIL.

THANK YOU KIMBERLY.

ALRIGHT, SO NOW OUR FINANCIALS FOR THE YEAR TO DATE THROUGH FEBRUARY.

OVERALL REVENUES WERE 12% UP.

ONCE AGAIN, WE'VE BEEN NORMALIZING EVERY MONTH TO TAKE THE ONE TIME ITEMS OUT DRIVING THE HIGH PERCENTAGE OF 12%.

AND FROM A NORMALIZED BASIS, YEAR TO DATE, WE'RE JUST UP, UP UP 1000001.5%.

ALL THE DIFFERENT CATEGORIES ARE LISTED UP ABOVE.

UM, UH, DON'T KNOW IF THERE'S ANYTHING I WOULD REALLY WANT TO CALL OUT IN THIS.

THE ONE THING I WILL SAY IS IN THE REAL ESTATE TRANSFER FEES, UH, YOU CAN SEE THAT WE DON'T, EVEN THOUGH IT'S STILL VERY STRONG, WE DID NOT COLLECT IN THE MONTH OF FEBRUARY DUE TO A SOFTWARE CONVERSION AT BEAUFORT COUNTY.

SO WE, WE, WE, THAT'S SINCE BEEN FIXED AND WE NOW WILL GET TWO MONTHS.

SO WE'LL PICK IT BACK UP IN MARCH.

BUT JUST, THAT'S THE ONE THING I WOULD CALL OUT FROM A, UM, A, UM, REVENUE PERSPECTIVE FOR THE MONTH ON EXPENSE, THE SAME TYPE OF, UH, WE ARE UP 6.8 MILLION YEAR OVER YEAR.

HOWEVER, IF YOU TAKE SOME OF THE NORMALIZING ITEMS OUT, AND ESPECIALLY THE BEACH BOND PAYOFF, UM, WE ARE ABOUT 700,000 LOWER FROM A TOWN PERSPECTIVE YEAR OVER YEAR, UH, ON AN EXPENSE PERSPECTIVE.

SO OVERALL, WE'RE TRACKING WELL, AND YOU'LL SEE IN A MINUTE HERE, UH, ON THE FUND BALANCE WALK, WE ARE TRACKING WELL FROM THAT PERSPECTIVE CIP UPDATE.

UM, WE HAVE HERE THE PRELIMINARY CIP ROLLOVER FOR THIS, FOR THE BUDGET OF 27 BUDGET IN HERE.

THAT MIGHT CHANGE.

WE'RE FINALIZING CIP RIGHT NOW FOR THE BUDGET, BUT IT WOULDN'T BE MATERIAL.

BUT RIGHT NOW, AS OF WHEN THIS BOOK WAS DEVELOPED, ABOUT 12.4 MILLION OF THE 97.7 MILLION WOULD BE DEFERRED TO 2027.

THE PERCENTAGES ON THE FAR RIGHT ARE TO THE AMENDED BUDGET NUMBER.

UM, WE DON'T, WE DIDN'T DO IT TO THE, SO THE PERCENTAGES WOULD BE HIGHER, UH, BASED UPON THE SPEND.

UM, UH, THEN COMMITTED VERSUS THE AMOUNT, UH, FOR THE AMENDED BUDGET, LESS THE ROLLOVER, BUT STILL WE'RE AT 79%.

ONE THING TO NOTE STORMWATER IS AT 26%.

UM, THERE'S BEEN A LOT OF WORK ON STORMWATER, WHICH WE'LL WE'LL CONTINUE TO GO THROUGH, BUT, UH, UM, WE WILL TALK MORE ABOUT THAT WHEN WE DO THE BUDGET.

BUT, UH, WE DID GO THROUGH ALL THE STORM WATER PROJECTS FOR THIS YEAR AND NEXT YEAR TO TRY TO GET A GOOD CIP NUMBER FROM THAT PERSPECTIVE.

THAT'S THE ONE THAT'S THE LOWEST I WOULD SAY.

SO, UM, I HAD A QUESTION REGARDING THE BEACH RENOURISHMENT AND SO WE'RE MAKING GOOD PROGRESS THERE.

UM, AND BETWEEN THE ACTUAL SPEND AND THE COMMITTED, UM, YOU HAVE IT LISTED AT 44 MILLION WITH A BUDGET OF 47.7.

UM, ARE YOU FEELING CONFIDENT ABOUT, UH, EITHER MEETING THAT OR YES.

[00:25:01]

AND THIS IS THE PROJECTION FOR 26 THAT WE'RE GONNA USE WHEN WE'RE WORKING THROUGH THE 27 BUDGETS.

SO WE'VE UPDATED ALL OF THE REVENUE PROJECTIONS, SO THESE ARE WHAT WE'RE GOING WITH FOR THE BUDGET.

UM, AND THEN ALSO ON EXPENSE.

THESE ARE THE EXPENSE PROJECTIONS AS WELL THAT WE'LL BE TALKING THROUGH WHEN WE DO THE BUDGET.

AS YOU CAN SEE ON A REVENUE SIDE, UM, SINCE WE DID NOT BUDGET SPECIAL REVENUES LAST YEAR, IT LOOKS WE WILL BUDGET 'EM THIS YEAR FOR 27, BUT THAT THE GROWTH IS THERE.

BUT ONE OF THE THINGS THAT WAS BUDGETED WAS THE FEMA REIMBURSEMENT OF 7 MILLION.

WE'VE SINCE SPLIT THAT HALF THIS YEAR AND HALF IN 27.

SO IT'S NOT LIKE IT'S GONE, BUT WE'RE JUST KIND OF GAUGING THE TIMING OF THAT.

I THINK, UM, WE'RE AT WHAT MICHELLE, 10 MILLION SO FAR, CLOSE, CLOSE TO 10 MILLION THAT WE'VE SUBMITTED FOR REIMBURSEMENT TO FEMA AND SHE'S WORKED.

MICHELLE'S WORKING WITH THE STATE AND FEMA ON THIS REIMBURSEMENT.

SO, UM, THINGS ARE MOVING, BUT WE ARE GETTING ALL OF OUR REIMBURSEMENTS IN.

AND THE GOOD NEWS IS IT'S ABOVE SEVEN.

SO IF WE CAN GET ALL THAT, IT WOULD, IT WOULD GIVE US UPSIDE THERE.

UM, THE OTHER ITEM THAT IS INCLUDED NOW IS THE ON SPECIAL REVENUE IS THE STR THAT WAS PASSED LAST WEEK, WHICH WILL THEN ADD, UH, HIGHER STR REVENUES FOR THIS YEAR.

IF YOU LOOK AT THE EXPENSE SIDE OF THINGS, ON OUR GENERAL FUND, WE'RE PROJECTING TO SPEND LOWER THIS YEAR AS WELL AS ON DEBT SERVICE.

AND THEN, UH, STORM WATER IS QUITE A BIT LOWER WHEN WE WENT THROUGH AND DID THE PROJECTION.

ONCE AGAIN, IT'S THE ABILITY, THE, THE, UH, TO GET EVERYTHING DONE THAT WAS BUDGETED.

SO WE'RE KIND OF REALIGNING WHAT CAN BE DONE FROM A OPERATIONAL EXPENSE PERSPECTIVE ON STORMWATER.

SO THAT'S A BIG DROP THERE AND IT'S BEEN KIND OF NORMALIZED OUT MOVING FORWARD, WHICH WE'LL GET INTO IN THE BUDGET.

UM, SPECIAL REVENUE, THAT'S THE GRANTS THAT WE DO.

ONCE AGAIN, IT WASN'T BUDGETED LAST YEAR, BUT WILL BE THIS YEAR.

AND THEN, UM, WE TALKED ABOUT CAPITAL.

UM, NOW THAT 15.2 MILLION REDUCTION IN CAPITAL, ABOUT 12 AND A HALF IS THE DEFERRAL TO 27.

THE DELTA OF THAT IS JUST REDUCE SPEND.

THAT'S WHAT THAT IS.

IT'S NOT, IT'S NOT BEING DEFERRED, IT'S JUST NOT BEING SPENT.

SO WE ARE, UH, LESS FROM A CIP PERSPECTIVE THAT'S GONNA GO BACK INTO FUND BALANCE.

UH, GULLAH GEECHEE IS JUST REALLY PROJECTS THAT WERE PLANNED IN 2026 BUDGET THAT ARE NOW BEING DEFERRED OUT TO 27 AND BEYOND.

SO THAT'S THE REDUCTION THERE AS WELL AS IN WORKFORCE HOUSING.

UM, THAT'S, UH, COMING THROUGH ALSO.

AND OF COURSE WE HAVE THE BUDGET AMENDMENT DOLLARS THAT WERE PASSED, AND THAT'S THE INCREASED EXPENSE FROM THAT PERSPECTIVE.

SO WHEN YOU ROLL IT ALL UP, WE'RE AT ABOUT 252 MILLION FUND BALANCE, WHICH IS ABOUT A MILLION LOWER THAN HOW AS WE STARTED.

THE YEAR.

26 OF THAT IS PROBABLY ROUGHLY THE GO BOND THAT HAS NOT BEEN SPENT.

SO WE WOULD BE DOWN LOWER, BUT THE GO BOND IS IN THERE.

WE DID, UH, WE DID RECEIVE THE MONEY FOR THE BOND LAST WEEK.

GETTING INTO THE COUPLE ITEMS. JUST TO HIGHLIGHT HERE, WHEN WE'RE LOOKING AT IT BY FUND BALANCE WALK, IF WE WANNA LOOK AT THE GENERAL FUND, WE'RE IN A SURPLUS OF ABOUT 5.3 MILLION.

SO WHEN WE COME FORWARD IN THE BUDGET, WE'LL PROBABLY WE'LL BE LOOKING AT OUR FUND BALANCE RESERVES AND LOOKING AT OUR POLICY TO SEE IF WE CAN RAISE THOSE WHERE WE CAN.

THIS WOULD BE ONE THAT WE'RE GONNA RECOMMEND.

IF YOU LOOK AT DEBT SERVICE, REMEMBER OUR TARGET WAS AROUND TWO AND A HALF MILLION AT A MINIMUM.

RIGHT NOW WE'RE PROJECTING 2.9 MILLION AT THE END OF 26 FROM, UH, AFTER WE PAY OFF OUR FIRST PAYMENT OF THE GO BOND.

AND THEN THE OTHER ITEM I WANTED TO NOTE HERE, IT'S NOT ON HERE, UH, BUT IT WILL BE ON NEXT MONTH'S STORM WATER.

WE HAVE FIXED ASSETS.

OKAY? SO THE STORM WATER FUNDS AND ENTERPRISE FUNDS.

SO IT'S GAP.

AND SO WE NEED TO, UM, WHEN WE BUY FIXED ASSETS ON STORMWATER, WE NEED TO REFLECT THAT AS A OUT OF FUND BALANCE.

AND SO IN THE FUND BALANCE OF STORMWATER INCOME STATEMENT, WE BOOK THE DEPRECIATION.

SO THAT TAKES THAT DOWN FROM A CASH PERSPECTIVE.

BUT WE NEED TO RESTRICT THE NET FIXED ASSETS, WHICH HAS NOT BEEN DONE IN THE PAST.

SO IT'S, RIGHT NOW WE'RE PROJECTING THAT TO BE ABOUT SIX AND A HALF MILLION.

YOU MIGHT HAVE MORE MONEY IN STORMWATER THAN YOU DO, IF THAT MAKES SENSE.

SO IF YOU LOOK AT THE 5 MILLION PLUS SIX AND A HALF MILLION, THAT 8.1 MILLION IS AROUND 1.6 MILLION.

OKAY? AND, AND SO IN NEXT YEAR'S, THAT'S SOMETHING THAT WAS, UH, IT WAS CAUGHT AND IT NEVER HAD BEEN DONE IN PRIOR, BUT WE NEED TO DO THAT 'CAUSE IT'S GIVEN AN ARTIFICIAL BALANCE,

[00:30:01]

SO THOSE ARE SOME OF THE THINGS I WOULD CALL OUT FROM A WALK PERSPECTIVE.

SO WHEN YOU IMPLEMENT THAT CHANGE, IT'D BE GREAT TO HAVE AN EXHIBIT THAT WALKS THROUGH EXACTLY RIGHT.

UM, WHAT THE IMPACTS ARE AND HOW YOU, AND HOW YOU GOT TO THAT.

YES.

SO ALL THE OTHER FUNDS THAT ARE GOVERNMENTAL FUNDS AS WE BUY ASSETS, THEY'RE JUST EXPENSED AND THAT'S WHY WE DON'T HAVE TO DO THAT.

BUT YOU DO NEED TO DO THAT ON ENTERPRISE FUNDS.

UM, SPECIAL REVENUE, NOTHING REALLY, UH, TO CALL OUT THERE.

JUST THE CHANGE IN FUND BALANCE ON BEACH, WE STILL HAVE 15 MILLION WE'RE PROJECTING AT THE END OF THE YEAR, EVEN AFTER THE $20 MILLION BEACH PRESERVATION RESERVE.

SO, UH, ENDING VERY STRONG FROM THAT PERSPECTIVE AS WELL AS REAL ESTATE TRANSFER FEES ENDING UP AT 18.3 MILLION.

SO WE'RE GONNA DO A SCHEDULE SIMILAR TO, THE GOAL WOULD BE FOR THE 27 BUDGET.

SO WE CAN KIND OF SEE HOW WE'RE AFTER, UH, SOURCES OF FUNDS FOR CIP FOR THE 27, HOW ARE WE LOOKING IN, IN THESE FUND BALANCE PERSPECTIVES.

OTHER THAN THAT, YOU KNOW, THOSE WOULD BE THE TWO THINGS.

UM, AND THEN LAST ON A QUARTERLY REVENUE.

SO AS I MENTIONED, THIS IS THE REVENUE THAT WE'RE GONNA BE USING FOR THE BUDGET, 1 32 0.5 MILLION.

UM, AND AS YOU HAVE HAD IN THE PAST, THE BLUE IS OUR ACTUAL PROJECTION.

AND THEN WE OF COURSE WE HAVE OUR NORMALIZED.

SO IF YOU LOOK FROM A GREEN PERSPECTIVE, UH, WE'RE TRACKING JUST A LITTLE BIT HIGHER THAN, UH, 20, 25 FULL YEAR.

UM, AND ON THE GENERAL FUND, WE ARE TRACKING HIGHER THAN BUDGET, 51.9 MILLION VERSUS 46.5.

THAT'S HELPING DRIVE THE SURPLUS AND THE GENERAL FUND BALANCE, UM, A LOT OF THAT IS DUE TO THE PROPERTY TAXES THAT HAVE COME THROUGH HIGHER THAN WHAT WAS BUDGETED FOR.

WE'VE GOT A LOT OF REVENUE CHARTS HERE.

I'M NOT GONNA WALK THROUGH ANY, EVERY ONE OF THEM FROM AN EFFORT AT TIME, BUT YOU HAVE 'EM HERE IF YOU HAVE ANY QUESTIONS.

UM, AND THEN FINALLY ON A, SO HERE WE GO.

AND THEN, UH, FROM A TREASURY PERSPECTIVE, RIGHT NOW AT THE END OF FEBRUARY, 248 MILLION, AS YOU SAW LAST MONTH, IT'S GONE UP AND IT WILL CONTINUE TO GO UP BASED UPON THE, UM, GL BONDS THAT WE RECEIVED.

UM, AND THEN ONCE AGAIN, WE'RE PROJECTING ABOUT 2 52 AT THE END OF THIS YEAR.

SO WE'LL SEE HOW GOOD OUR PROJECTIONS ARE.

SO, BUT THAT'S IT.

THANK YOU, SIR.

I DON'T HAVE ANY QUESTIONS, WHICH IS REALLY A TESTAMENT TO YOU, UM, LAYING ALL THIS OUT AND MAKING PROJECTIONS AND TELLING THE STORY OF WHERE WE'RE GOING TO BE BY THE END OF THE FISCAL YEAR.

AND SO WHAT THAT ALLOWS ME TO DO WHEN I'M REVIEWING THIS IS JUST LOOK FOR WHAT HAS CHANGED.

UM, YOU KNOW, WHAT, WHAT IS THE DIFFERENCE? AND, UM, YOU KNOW, AS YOU WENT THROUGH THIS, IT, UM, YOU KNOW, WE'RE, UM, LANDING THE PLANE AS YOU HAVE RIGHT? INDICATED AND THE ONLY TWO NEW THINGS ARE THE FEMA UH, BEING SPLIT BETWEEN TWO FISCAL YEARS.

RIGHT? AND NOW THIS, UH, STORM WATER ACCOUNTING PIECE THAT YOU'RE GOING TO BE GOING THROUGH, RIGHT? BUT EVERYTHING ELSE IS KIND OF PERFORMING AS YOU HAD EXPECTED.

UM, WHICH IS, WHICH IS GOOD.

AND I APPRECIATE THAT.

I KNOW THAT TAKES A LOT OF WORK AND EFFORT YEP.

TO BE FORECASTING WHERE WE'RE GOING TO BE AT ALL, AT ALL TIMES.

BUT IT JUST GIVES US A LOT OF COMFORT THAT, YOU KNOW, YOU'RE, YOU KNOW, WE'RE COMING IN AS EXPECTED.

SO THANK YOU FOR THAT.

EXCUSE ME.

IN ORDER TO, UH, SUMMARIZE MR. BIRD, WHAT WOULD YOU, UM, SAY ARE THE TWO OR THREE MATTERS THAT THE TOWN COUNCIL SHOULD BE MOST CONCERNED ABOUT LOOKING INTO THE FUTURE? WELL, I, I WOULD SAY, UM, BASED UPON WHAT WE'RE EXPERIENCING NOW WITHIN THE HIGHER COST OF ENERGY AND WHAT THAT COULD DO TO OUR COST ACROSS THE BOARD, FROM A SPEND PERSPECTIVE, EVERYTHING GOES UP WHEN ENERGY GOES UP.

AND SO IF IT CONTINUES TO BE THAT WAY, THAT COULD IMPACT OUR SPEND SIDE JUST TO GET OUR CIP DONE THINGS COST MORE.

AND THE OTHER ITEM WOULD REALLY BE, COULD BE THE IMPACT TO TOURISM IF, UM, YOU KNOW, FOLKS FEEL THE PINCH AT HOME, ARE THEY GONNA, ARE THEY GONNA MAKE THAT TRIP OR NOT? AND SO, UM, I WOULD, YOU KNOW, THIS IS SMALL THEN THAT'S A, YOU KNOW, TWO OR THREE MONTHS THAT WE HOPE THEN THAT'S A GOOD THING.

BUT WE DON'T KNOW.

SO AS WE ARE GOING THROUGH RIGHT NOW INTO 27, WE'RE NOT REALLY, WE DIDN'T REALLY PROJECT HIGHER COST FROM A SPENDS PERSPECTIVE ON INFLATION, IF YOU WILL.

AND WE DID NOT REALLY ANTICIPATE ANY REDUCTION OF REVENUE FROM TOURISM.

THAT'S WHAT WE, WE WERE CONSERVATIVE ON PROPERTY TAX VALUATIONS, THAT KIND OF A LITTLE BIT OF A CUSH THERE 'CAUSE WE PUT 2% IN.

BUT

[00:35:01]

I WOULD, I WOULD SAY FROM A OVERALL PERSPECTIVE, JUST TO KEEP OUR, AND THAT'S WHY WE'RE DOING THE SALES TAX REPORTING JUST TO SEE IF WE START TRENDING IN THE AREAS THAT WE DO GET THE REVENUE FROM, OR QUITE FRANKLY NOT.

'CAUSE IT'S A BIGGER PICTURE OF WHAT'S HAPPENING ON THE ISLAND.

SO I THINK JUST A GOOD FISCAL MANAGEMENT OF LOOKING AT THINGS IS VERY, VERY, VERY POSITIVE.

UM, AND, UM, JUST GOING THROUGH THE BUDGETING PROCESS, UM, THE LINE BY LINE THAT HAS GONE THROUGH WITH EVERY DEPARTMENT OF EVERY GENERAL LEDGER ACCOUNT TO EXPLAIN, UH, ANY RISE ABOVE WHAT WAS IN THE PAST AND BEING ABLE TO JUSTIFY THAT, THAT'S A VERY GOOD PRACTICE TO HAVE.

SO THOSE ARE, THAT'S WHAT I WOULD SAY.

UM, JUST A THOUGHT, UH, BASED ON THE, THE CONVERSATION, UM, YOU KNOW, WE, WE ON HILTON HEAD BEEN IN THIS, UH, SITUATION OR SIMILAR SITUATION BEFORE, UM, WHEN IT COMES TO TRAVEL AND THE, THE DRIVE MARKET TO HILTON HEAD IS AND CAN BE VERY GOOD FOR US IF WE ARE TELLING THOSE FOLKS THAT THEY SHOULD COME AND IN SOME CASES, SOME INCENTIVES TO COME.

UM, WHICH IS, I BRING THAT UP BECAUSE WE A LOT OF TIMES, UM, I GUESS PUSHBACK ON OUR DMO, THEY'VE SAID FROM TIME TO TIME THAT THEY DON'T MARKET DURING THE SUMMER.

AND I'M ALREADY HEARING THAT THE, UH, THE RENTAL MARKET IS SOFT JUNE AND JULY.

WHICH MEANS THAT PEOPLE ARE BEING LOW HESITANT ABOUT THEIR TRAVEL, WHICH TO ME MEANS THAT IF WE LOOK INTO EXPERIENCE THE SAME TYPE OF REVENUE THAT WE HAD LAST YEAR, THEN THERE PROBABLY NEEDS TO BE SOME EFFORT AROUND THAT DRIVE MARKET.

MOVE ON TO OUR UNFINISHED BUSINESS.

SO I'M JUST SORT OF SHARING INFORMATION, UM, SINCE THE DISCUSSION IS, IS TALKING ABOUT THE ENERGY INCREASE AND HOW THAT COULD NEGATIVELY AFFECT US.

ALRIGHT.

THANK YOU MR. BIRD.

SURE.

FOR THE UPDATE, WE WILL

[5.a. Review and Discussion of the Town of Hilton Head Island's Affiliated Agency Funding Request Applications for Fiscal Year 2027 - Dave Byrd, Finance Director]

UH, THE, UH, COMMITTEE WILL BE MAKING RECOMMENDATION TO FULL TOWN COUNCIL, UM, ON THE AFFILIATE AGENCY FUNDING REQUESTS THAT WILL BE TAKEN UP DURING THE BUDGETARY, UH, DELIBERATIONS.

NOW, UM, WE'VE GONE THROUGH THIS A FEW TIMES, UM, AND I THINK THE OUTLIER WAS THE, UH, HILTON HEAD FOUNDATION, UM, I'M SORRY, OUTSIDE FOUNDATION.

UH, SO IF WE CAN BRING FORTH THE NEW INFORMATION THERE, AND THEN WE WILL TAKE THIS UP AS A WHOLE ONCE WE HAVE THAT DISCUSSION.

GREAT.

UNLESS THERE'S, SO I'M GONNA ASK ANGIE TO COME UP AND SPEAK ABOUT THE OUTSIDE FOUNDATION.

WE'VE GOT A TERM SHEET AND, AND OTHER QUESTIONS THAT COULD BE ANSWERED BASED UPON FEEDBACK FROM THE LAST, UH, MEETING.

GOOD MORNING, ANGIE STONE FOR THE RECORD.

IT'S A PLEASURE TO BE HERE TODAY WITH YOU.

UM, I UNDERSTAND THAT YOU RECEIVED THE ADDITIONAL INFORMATION THAT THE OUTSIDE FOUNDATION PROVIDED, UM, DR.

FER IS NOT HERE.

UM, SO ARE THERE ANY QUESTIONS RELATED TO THAT DOCUMENTATION THAT I MIGHT BE ABLE TO HELP WITH BEFORE WE TALK ABOUT, UM, OPTIONS FOR, UH, THIS TYPE OF WORK? SHOULD WE TAKE IT ON OURSELVES? OKAY.

UH, MS. ALFRED, DO YOU HAVE ANY QUESTIONS? NO.

MS. DUNNER? NO.

COST CURRENTLY RANGES FROM 60 TO $620 PER LINEAR FOOT FOR BED RESTORATION.

UM, SO WE TOOK A LOOK AT, UH, WHEN WE CREATED THE, UM, THE TERM SHEET, THE DRAFT TERM SHEET, WE NARROWED IT TO FOCUS ON THE BED RESTORATION PORTION OF THEIR WORK.

UM, THE OVERALL PROGRAM IS $100,000 ROUGHLY, IS WHAT, UM, DR.

FRUIT PROVIDED.

UH, I BELIEVE THAT IF WE FUND THE, UH, BED RESTORATION PORTION OF THAT, UM, UNDER THE REQUEST FOR 46,000, SINCE IT IS A REIMBURSEMENT, UM, SCENARIO, SHOULD THEY NOT SPEND THAT MUCH ON BED RESTORATION, WE WOULD BE ABLE TO, UH, RETAIN IT.

UH, WE ALSO FOUND THAT, UH, WE CAN PROVIDE THIS FUNDING THROUGH THE BEACH PRESERVATION FEE.

SO THERE IS SOME FUNDING AVAILABLE, UM, FROM THAT STANDPOINT.

UM, OTHER COMMUNITIES, CHARLESTON, HORRY COUNTY FOLKS IN NORTH CAROLINA AND FLORIDA, WE'VE ALL BEEN DOING THIS FOR 15 TO 20 YEARS.

AND THE

[00:40:01]

THAT'S A HUGE, UM, SPAN.

UH, I DON'T KNOW SPECIFICALLY HOW MUCH THE COST PER LINEAR FOOT IS HERE, UM, BUT IF WE WERE TO DO IT OURSELVES, WE COULD LOOK AT THAT SORT OF COST, UM, TO PAY, UH, A CONTRACTOR IF WE USE, UM, MANMADE MATERIALS, RIP WRAP, UM, THAT SORT OF THING.

IT CAN BE UP TO $2,000 PER LINEAR FOOT.

SO IT'S, IT'S AN EXPENSIVE PROPOSITION.

UM, AND AGAIN, FOLKS FROM HORRY COUNTY DOWN TO CHARLESTON AND, AND FURTHER SOUTH HERE ARE DOING THIS SORT OF THING.

UM, CHARLESTON HAS SOME PROJECTS RECENTLY THAT RANGE ANYWHERE FROM A HUNDRED THOUSAND DOLLARS FOR A SMALL LOCALIZED RESTORATION TO OVER A MILLION DOLLARS FOR A MULTI-YEAR RESTORATION IN THE HARBOR.

UM, SO IT'S, IT IS KIND OF ALL OVER THE PLACE.

I WOULDN'T KNOW WHERE TO BEGIN TO LOOK FOR SOMEONE TO HIRE TO DO THIS WORK.

UM, THE OUTSIDE FOUNDATION HAS DONE A, A GOOD JOB OF RALLYING TROOPS TO HELP GATHERING VOLUNTEERS, GETTING BOATS AND BOAT CAPTAINS TO HELP GET FOLKS TO THE PLACES THAT THEY'RE BUILDING THE REEFS, COORDINATING WITH SCD AND R TO SELECT LOCATIONS HERE LOCALLY TO DO THE WORK.

UM, ASIDE FROM THAT, UM, I, I DON'T KNOW WHAT ELSE I CAN PROVIDE TO YOU GUYS.

ARE THERE QUESTIONS THAT YOU HAVE THAT I MIGHT BE ABLE TO FILL IN SOME BLANKS? OKAY.

MS. TONER? YES.

SO THANK YOU VERY MUCH FOR WORKING WITH THE OUTSIDE FOUNDATION AND PUTTING THIS TERM SHEET TOGETHER.

UM, AS MENTIONED AT THE LAST MEETING THAT THIS WAS, UH, AN ORGANIZATION I WAS STRUGGLING WITH, UM, YOU KNOW, AND THEY DO GREAT WORK.

UM, BUT I WAS TRYING TO FIGURE OUT HOW THEY FIT INTO THE AFFILIATED AGENCY.

AND NOW THAT YOU, YOU'VE ANSWERED THAT QUESTION, UH, BECAUSE ONE OF THE CRITERIA IS THAT WE PROVIDE PROGRAMS AND SERVICES FREQUENTLY OFFERED THROUGH GOVERNMENT DEPARTMENTS AND OTHER MUNICIPALITIES, AND SO OTHER MUNICIPALITIES IN SOUTH CAROLINA ARE FUNDING THIS WORK.

SO THAT ANSWERS THAT QUESTION FOR ME.

UM, AND SO AS WE THINK ABOUT MOVING FORWARD WITH THIS, UH, WE'LL NEED A MEMORANDUM OF UNDERSTANDING AND MAKE IT CLEAR THAT WE ARE, UH, SUPPORTING THIS WORK, UM, THE LIVING SHORELINE PROGRAM, AND THAT IS OUR SCOPE, UH, WITHIN THE AFFILIATED AGENCY PROGRAM VERSUS THE ENTIRE, UH, ORGANIZATION.

UM, AND I THINK THAT ANSWERS AND ADDRESSES THE QUESTIONS THAT I HAD, SO THANK YOU FOR THAT.

MR. ALFORD, UH, I, I'M COMFORTABLE.

UM, I APPRECIATE THE WORK THAT, UH, STAFF HAS DONE TO COORDINATE WITH OUTSIDE FOUNDATION ON THIS ENDEAVOR.

UM, I'M, I'M GOOD WITH THE TERM SHEET, UM, TRACK AND REPORT PROGRAM METRICS.

I THINK THAT'S IMPORTANT.

I I CAN APPRECIATE THAT YOU DON'T REALLY HAVE A BASELINE NOW BECAUSE IT'S ALL OVER THE PLACE, BUT WE CAN CREATE OUR OWN.

THE, THE COST PER LINEAR FOOT I THINK IS IMPORTANT.

UM, THE SALARY AND I, I TAKE IT A STEP FURTHER SINCE WE'RE NOT PAYING THE VOLUNTEERS, BUT THAT'S, THAT'S A VALUE I THINK WHEN ABSOLUTELY.

WHEN WE REPORT BACK, THAT NEEDS TO BE INCLUDED IN IT AS WELL.

UM, ARE THERE ANY OTHER QUESTIONS OR COMMENTS ABOUT ANY OF THE APPLICANT'S? UM, WITHIN, WE'RE GONNA PUT UP THE SPREADSHEET HERE.

UH, THE, SO WE CAN, UM, YOU HAVE THE ORIGINAL REQUEST.

WHERE AM I? ZENDAYA? UM, YEAH, SO WE HAVE THE ORIGINAL REQUEST, THE, AND WE HAVE THE ATEX AWARDS HERE AS WELL, BUT WE WERE GOING TO COMPLETE, UH, THE DOLLAR AMOUNTS HERE BASED UPON YOUR VOTE FOR THE FUNDING BY AGENCY.

THEIR BUDGET OF 3 74, THAT'S IN EXCESS OF 42% OF THEIR TOTAL BUDGET COMES FROM THE TOWN.

SO, UH, COMMITTEE MEMBERS HAVE ANY FURTHER QUESTIONS OR COMMENTS ABOUT ANY OF THE, UH, REQUESTS, MS. ? UM, I HAVE SEVERAL QUESTIONS AND CONCERNS ABOUT THE FUNDING OF THE SEA TURTLE PATROL ISSUE.

UH, I'M NOT GOING TO SUGGEST FOR REASONS, I'LL MENTION THAT WE MAKE ANY CHANGES FOR THE CURRENT YEAR, BUT I WOULD BE VERY INTERESTED IN HAVING, UH, A BETTER UNDERSTANDING OF SOME OF THE FACTORS THAT RELATE TO THEIR APPLICATION, UH, FOR NEXT YEAR.

UH, FIRST OF ALL, WHEN YOU LOOK AT THE SEA TURTLE PATROL FUNDING 159 PLUS VERSUS

[00:45:01]

AND THAT FIGURE IS SUBSTANTIALLY HIGHER THAN ANY OF THE OTHER SIX ORGANIZATIONS THAT ARE LISTED THERE.

UM, AND, AND THAT'S SOMEWHAT OF A MATTER OF, OF CONCERN TO ME.

THEY HAVE SEVERAL HUNDREDS OF THOUSANDS OF DOLLARS AVAILABLE TO THEM.

UM, AND, UH, IT MAY BE THAT THEY ARE TRYING TO ACCUMULATE FUNDS FOR A POTENTIAL, UH, REAL ESTATE REMODELING PROJECT, WHICH I HAVE SUSPICIONS IS NOT GOING TO HAPPEN.

UH, SO THAT IN EFFECT, THEY ARE VERY LIKELY TO HAVE A LOT OF EXCESS CASH, AND I THINK THAT NEEDS TO BE TAKEN INTO CONSIDERATION.

AND THE THIRD ASPECT IS THAT YOUR MEMO OUTLINES EIGHT FACTORIES IN THE STRATEGIC PLAN THAT ARE USED AS GUIDELINES FOR DETERMINING WHO QUALIFIES AND TO WHAT EXTENT.

AND ON, ON A PERSONAL BASIS, I, I DON'T KNOW WHERE THEY FIT ON THAT WITH THE EXCEPTION OF THIS YEAR.

THIS YEAR THEY ARE INSTRUMENTAL IN CONNECTION, BUT BEACH RENOURISHMENT, UH, BUT NEXT YEAR, THAT'S NOT GONNA BE TRUE.

IT WON'T BE TRUE FOR ANOTHER SIX OR SEVEN YEARS AFTER THAT.

SO I, I PERSONALLY AM UNCLEAR AS TO WHERE THEY FIT IN RELATION TO THE EIGHT LISTED TOPICS UNDER THE STRATEGIC PLAN THAT ARE INCORPORATED IN YOUR, IN YOUR STAFF MEMO.

SO I WOULD APPRECIATE IF THOSE ISSUES COULD BE ADDRESSED.

UH, AS I SAY, I'M NOT REQUESTING ANY DIFFERENCE FOR THIS YEAR BECAUSE I THINK, UH, THE OVERWHELMING ASPECT IS THAT THEY ARE ESSENTIAL FOR THE BEACH TREE NOURISHMENT PROJECT, AND THAT IS A TOWN IMPORTANT IN TOWN PURPOSE, BUT THAT'S NOT GONNA BE TRUE NEXT YEAR IN THESE OTHER FACTORS, I THINK WILL BECOME MUCH MORE GLARING.

UNDERSTOOD.

MS. DDA? YES.

SO, UM, I THINK THAT THE DISCUSSION BETWEEN THE OUTSIDE FOUNDATION AND THE DIRECTION THAT WE'RE GOING AND QUESTIONS THAT THE, UM, COUNCILMAN ALFRED HAS ON THE SEA TURTLE PATROL, IT JUST PROVIDES US AN OPPORTUNITY TO GO BACK TO OUR, UH, PROGRAM PURPOSE.

AND AS I HAD MENTIONED, UM, IN PRIOR MEETINGS, I THINK THERE'S AN OPPORTUNITY TO, UH, TAKE A LOOK AT THAT, UM, SO THAT WE CAN BE CLEARER ABOUT WHAT IT IS THAT WE ARE PAYING FOR, WILLING TO PAY FOR AS AN AFFILIATED AGENCY.

AND, UM, YOU KNOW, MY CONCERN AGAIN, WAS HAVING EACH ONE OF THESE AS A STANDALONE ITEM THAT COULD POTENTIALLY BE OF THE REASON WHY YOU RECEIVE FUNDING AS OPPOSED TO, UM, LOOKING AT ITEMS ONE AND, AND THREE AS YOUR MAIN, UM, REASONS, UM, AND ALIGNMENT.

AND THEN NUMBERS TWO AND FOUR BEING UNDERNEATH THAT, AND THAT JUST FOR THE PUBLIC, THAT'S THE, UM, UH, ONE AND THREE INCLUDE THE SERVICES FREQUENTLY OFFERED THROUGH OTHER MUNICIPALITIES AND ME, UH, PROPERTY OWNED BY THE TOWN OF HILTON HEAD FOR A PURPOSE THAT SERVES PUBLIC NEED.

UM, AND I THINK IT JUST IS AN EVOLUTION OF US, UH, BEING MORE DIRECTIVE ABOUT HOW WE WANNA USE THIS MONEY.

AND AGAIN, LIKE WITH THE OUTSIDE FOUNDATION, WE ARE NOT, UM, INCLUDING THEM AS AN AFFILIATED ORGANIZATION IN TOTAL FOR ALL THE PROGRAMS THAT THEY PROVIDE, BUT BEING VERY CLEAR ABOUT WHERE THEY FIT IN FOR THE TOWN OF HILTON HEAD'S, UH, FINANCIAL FOCUS, WHICH IS ON THE LIVING SHORELINE.

SO JUST THINGS TO THINK ABOUT FOR OUR NEXT YEAR.

GOT IT.

WE GOING TO TAKE SOME PUBLIC COMMENT.

, WE DON'T HAVE ANY.

OH, UNLESS, AND WE'LL BRING IT BACK TO THE DAAS FOR EMOTION ON THIS TOPIC.

? YES.

WAIT.

ALL RIGHT.

I WILL GO AHEAD AND MAKE A MOTION.

I WANTED TO MAKE SURE I WAS MAKING THE CORRECT MOTION.

I MAKE A MOTION, UH, TO MOVE FORWARD, UH, THROUGH THE BUDGETING PROCESS.

UM, THE AFFILIATED AGENCY REQUEST AS LISTED IN THIS PACKAGE TOTALING 2.4 UH, MILLION DOLLARS.

ANY FURTHER DISCUSSION? ALRIGHT,

[00:50:01]

WE'RE READY FOR THE QUESTION.

[6.a. Review and Discussion of the Results of the Town of Hilton Head Island's General Obligation Bond Sale - John McGowan, Assistant Finance Director]

BUSINESS HERE, REVIEW AND DISCUSSION OF THE RESULTS OF THE TOWN OF HILTON HEAD ISLANDS GENERAL OBLIGATION BOND SALE.

MR. MCGOWAN, ASSISTANT FINANCE DIRECTOR, GREAT MORNING TO YOU, SIR.

GOOD MORNING TO YOU CHAIRMAN AND TWO MEMBERS OF THE COMMITTEE.

I'M HERE TODAY TO, UH, GIVE A BRIEF RECAP ON THE, UM, RESULTS OF THE RECENT BOND SALE OF THE GENERAL OBLIGATION BONDS.

RECALL IN DECEMBER, TOWN COUNCIL PASSED A BOND ORDINANCE THAT GAVE THE TOWN THE ABILITY TO ISSUE UP TO 35 MILLION IN GENERAL OBLIGATION BONDS TO BE PAID BACK OVER APPROXIMATELY 15 YEARS.

THE PROCEEDS WOULD BE USED FOR CAPITAL PROJECTS, UH, INCLUDING THE FIRE RESCUE, UH, HEADQUARTERS, AND E AND EOC FOR LAND ACQUISITION, FOR CONSERVATION PURPOSES, AND FOR COST OF ISSUANCE.

AND WE WENT TO THE BIG THREE RATING AGENCIES, MOODY'S, S AND P, AND FITCH.

AND GIVEN OUR EXCELLENT POLICIES, UH, LOW DEBT, UH, HIGH FUND BALANCES, ET CETERA, UM, WE, WE, UM, CAME BACK WITH THOSE AAAS, UH, WHICH OBVIOUSLY TRANSLATES INTO LOWER BORROWING COSTS AS WELL.

AND I'LL ADD, GIVEN THE FACT THAT THIS BOND ISSUE AS MOST LOCAL GOVERNMENT MUNICIPAL BOND ISSUES ARE TAX EXEMPT, THAT BRINGS OUR INTEREST RATE DOWN EVEN FURTHER.

I'LL, UH, SHIFT TO, IF YOU COULD SHIFT TO THE POWERPOINT, PLEASE.

OH, GREAT.

OH, YEAH, I'LL GO AHEAD HERE.

I SEE, I SEE.

UH, SOME OF THESE DETAILS WE, WE'VE ALREADY GONE OVER, BUT, UM, I WILL ADD.

THIS WAS A COMPETITIVE SALE.

UH, ESSENTIALLY OUR FINANCIAL ADVISOR FIRST TRYON, UH, POSTED OUR OFFERING DOCUMENT ON A SITE CALLED PARODY, UH, WHICH IS AVAILABLE TO EVERYBODY IN THE MUNICIPAL BOND MARKETPLACE TO SEE WHAT'S, UH, WHAT'S UP AND COMING.

WE DID THAT A WEEK OR TWO BEFORE THE SALE.

UH, WE RECEIVED 24 BIDS, WHICH ACCORDING TO FIRST TRY ON, AND OUR BOND COUNCIL BURN FOREMAN WAS A RECORD, UH, A LOT OF PEOPLE WANTED TO INVEST IN THE TOWN OF HILTON HEAD.

THE WINNER WAS SWBC INVESTMENT SERVICES, WHICH IS BASED IN SAN ANTONIO, TEXAS.

THEY CAME IN WITH A TRUE INTEREST COST OF 3.069%.

WE'LL CALL THAT 3.07.

THAT TICK REPRESENTS, UH, IS KIND OF AN INDUSTRY STANDARD ON HOW BIDS ARE JUDGED AND HOW ONE BOND DEAL CAN BE COMPARED TO ANOTHER.

IT ESSENTIALLY TAKES INTO ACCOUNT THE TIME VALUE OF MONEY, UM, GIVEN IT'S A 15 YEAR DEAL PRESENT VALUE BACK THAT, THAT 15 YEAR FLOW.

UH, THE NEXT SLIDE SHOWS THE, UH, THE BIDDERS AND OBVIOUSLY S WBCS NUMBER ONE THERE.

UM, IT'S KIND OF, THANK YOU VERY MUCH, UH, WITH THAT, UH, 3.07.

THE NEXT HIGHEST BIDDER IS JP MORGAN SECURITIES AT THREE 13, AND THEN YOU SEE A CLUSTER BETWEEN 3 3 13 AND THREE 20 FOR THE NEXT 20 OR SO BIDDERS.

SO SWBC WAS BY FAR AN OUTLIER, AND WE APPRECIATE THEIR AGGRESSIVENESS IN BIDDING ON THE DEAL, AND THAT'S A BENEFIT TO HILTON HEAD AND, AND ITS, UH, TAXPAYERS, SOME OF THE FINAL NUMBERS, UM, WE'VE GONE THROUGH, OOPS.

NO, IT'S NOT.

WHAT'S THAT, CINDY? YEAH, YOU CAN DO IT.

YOU CAN DO IT.

OKAY, GREAT.

UH, IF YOU CAN GO BACK ONE PAGE.

THERE WE GO.

THE DEBT SERVICE MILLAGE RATE.

UM, WE'VE TALKED ABOUT SOME OF THE THINGS ON THE LEFT SIDE ALREADY.

UH, I WILL ADD THAT THE, UH, FIRST MATURITY HERE IS JUNE 1ST.

IT'S IN LESS THAN TWO MONTHS.

IT'S VERY UNUSUAL FOR MUNICIPAL BOND DEAL.

UH, WE'LL TALK ABOUT THE REASONS WE DID THAT HERE IN A PAGE OR TWO.

UH, I'LL ALSO SAY THE PRINCIPAL PAYBACK IS AGGRESSIVE RELATIVE TO MOST MUNICIPAL BOND DEALS.

MOST HAVE LEVEL DEBT SERVICE, SO THE PRINCIPAL IS KIND OF BACK LOADED IN THE FINAL YEARS IN THIS CASE.

UM, WE HAD THAT BIG PRINCIPAL PAYMENT IN JUNE OF 26 DUE TO THE, UM, SIGNIFICANT FUND BALANCE THAT HAS GROWN IN THAT DEBT SERVICE FUND OVER THE LAST SEVERAL YEARS.

AND WE COULD SHIFT NOW.

OKAY, GREAT.

AND YOU CAN SEE THIS IS A REPAYMENT PLAN.

YOU CAN SEE ON THE, THE FAR RIGHT COLUMN.

THE DEBT SERVICE FUND BALANCE CURRENTLY STANDS AT THAT $14.3 MILLION RANGE THAT'S BUILT OVER, UP OVER THE LAST SEVERAL YEARS ON OR ABOUT JUNE 1ST, WE'LL TAKE 11.7 OUT OF THAT AND USE THAT TO PAY OUR DEBT SERVICE.

UH, WE'LL HAVE ABOUT A $2.5 MILLION BALANCE.

I KNOW DAVE'S PRESENTATION HAD IT AT ABOUT 2.9, SO I THINK SOME OF THAT IS INTEREST EARNINGS THAT WASN'T CALCULATED IN THIS CALCULATION.

UH, A COUPLE OTHER THINGS TO POINT OUT HERE.

UM, THE THIRD COLUMN FROM THE LEFT IS

[00:55:01]

UH, IT WAS 5.5 LAST YEAR.

WE LOWERED IT TO 5.1.

WE KNOW IT'S IN THE BUDGET THIS YEAR FOR 5.1.

THIS, THIS COMING, UH, FISCAL YEAR FOR 5.1 FOR OUR, UH, MODEL PURPOSES.

WE'RE GONNA KEEP IT AT 5.1 GOING INTO THE FUTURE.

THE VALUE OF A MILL HAS GROWN SIGNIFICANTLY SINCE, SIGNIFICANTLY SINCE LAST YEAR.

IT NOW STANDS AT ABOUT 1,000,003, UH, AN 8% GROWTH RATE RELATIVE TO LAST YEAR.

BUT FOR CON, FOR CONSERVATION, RE FOR, UH, GIVEN IN THE SPIRIT OF US BEING CONSERVATIVE, WE'RE GONNA STICK WITH A 2% GROWTH RATE ON THAT GOING FORWARD AS WELL.

THE TOTAL DEBT SERVICE IS, UH, IN THAT, UM, FIFTH COLUMN FROM THE RIGHT SERIES 2026 NET DEBT SERVICE.

YOU CAN SEE THAT BIG PAYMENT IN, IN 2026.

AND WE'LL SHOW THAT GRAPHICALLY ON THE NEXT PAGE.

AS THE NUMBER OF, UM, ENTITIES THAT WANTED TO PARTICIPATE.

UH, AND THESE SHOULD LOOK FAMILIAR.

ESSENTIALLY THAT LEFT CHART, IT SHOWS THE EXISTING DEBT SERVICE IN BLUE, THE PROPOSED DEBT SERVICE PER YEAR IN ORANGE.

THAT YELLOWISH LINE SLOPING UP TO THE RIGHT IS THE, UM, MILLAGE RATE, ASSUMING 5.1 MILS.

THE MILLIONS YOU SEE ON THAT Y AXIS IS THE COLLECTIONS GIVEN THAT 5.1 MILS, AND WE'RE SEEING THAT 2% GROWTH RATE.

UH, SO THERE'S PLENTY OF ROOM AFTER 2028 TO POTENTIALLY ISSUE NEW DEBT AND, AND OBVIOUSLY, UM, UH, PAY IT BACK.

UH, SO WE'RE, WE'RE, WE'RE COMING RIGHT UP TO THE TOTAL MILLAGE COLLECTIONS EXPECTED IN 27 AND 28 WITH THE EXISTING DEBT SERVICE.

BUT WE HAVE ROOM AFTER 20 2028.

ON THE RIGHT SIDE, YOU SEE THE 8% DEBT CAPACITY RECALL, SOUTH CAROLINA RESTRICTS MUNICIPALITIES FROM ISSUING GEO DEBT EXCEEDING 8% OF THEIR ASSESSED VALUE.

THAT'S REPRESENTED BY THOSE KIND OF GRAYISH, UM, UH, BARS.

UH, THE 8% IS 8% WITHOUT A VOTE OF THE PUBLIC.

I'M SORRY, THE 8% LIMIT IS WITHOUT A VOTE OF THE PUBLIC.

CORRECT? THERE IS, YOU'RE ABSOLUTELY RIGHT.

THERE IS A REFERENDUM OPTION, BUT WITHOUT A REFERENDUM, IT'S 8%.

VERY GOOD.

THE, UH, RED LINE REPRESENTS THE TOWN'S 80% LIMIT ON THE STATE'S LIMIT.

UH, SO YOU SEE, UH, THE TOTAL DEBT SERVICE, EXCUSE ME, TOTAL DEBT OUTSTANDING.

UH, THE BLUE IS THE EXISTING, THE ORANGE IS THE, IT'S LISTED AS PROPOSED, BUT THAT'S OUR NEW DEBT SERVICE.

AND YOU SEE THAT BIG STEP DOWN AFTER JUNE OF 26.

SO THAT, THAT SPACE UNDER THAT RED LINE GOING FORWARD IS OUR DEBT CAPACITY, OUR NON REFERENDUM DEBT CAPACITY.

SO PLENTY OF, OF, OF ROOM TO ISSUE NEW DEBT, EITHER GENERAL OBLIGATION OR REVENUE BONDS IF WE CHOOSE TO DO SO.

UH, THE LAST SLIDE IS A, UH, SUMMARY OF MOODY'S INVESTOR SERVICE, US CITIES AND COUNTY SCORECARD.

UM, IT'S KINDA THE, THE START THE BASIS OF THEIR ANALYSIS OF LOCAL GOVERNMENTS.

UH, AS YOU CAN SEE, THEY HAVE MULTIPLE FACTORS THAT THEY LOOK AT.

THE MAJOR FACTORS ARE THE ECONOMY, FINANCIAL, PERFORMANCE, INSTITUTIONAL FRAMEWORK, AND LEVERAGE.

AS YOU CAN SEE, WE'RE FIRMLY IN THE AAA CATEGORY AND EVERYTHING WE HAVE CONTROL OF, I'LL SAY THE INSTITUTIONAL FRAMEWORK IS ACTUALLY MOODY'S IMPRESSION OF THE STATE'S CONTROL OF THE LOCAL GOVERNMENTS.

SO WE MENTIONED THAT 8% LIMIT THAT THE TOWN THAT THE STATE IMPOSES ON TOWNS AND CITIES.

SO OTHER THAN THAT KIND OF SMALL LITTLE DING, UH, AND THAT'S OUTSIDE OF OUR CONTROL, EVERYTHING IS FIRMLY IN THE AAAS.

WE CAN GO THROUGH EACH OF THESE RATIOS IF YOU'D LIKE, BUT I'LL, I'LL JUST LEAVE YOU WITH A COUPLE OF TAKEAWAYS.

GIVEN THAT AVAILABLE FUND BALANCE RATIO IS SIGNIFICANTLY HIGHER THAN NEEDED FOR AAAS, WE HAVE THE ABILITY TO SPEND DOWN SOME OF OUR FUND BALANCE AND STILL STAY IN THAT AAA CATEGORY, AT LEAST FOR THAT MEASURE.

AND THAT LONG-TERM LIABILITIES RATIO UNDER LEVERAGE SHOWS THAT WE HAVE THE ABILITY TO ISSUE MORE DEBT AND STILL STAY IN THAT AAA RANGE.

SO, GOOD NEWS ALL AROUND, UM, THERE'S A LOT OF THANK YOUS TO GIVE, UH, BURN FORM, AND OUR BOND COUNCIL HAS DONE AN AMAZING JOB AS HAS FIRST TRY ON.

IN FACT, THEY'RE RESPONSIBLE FOR SEVERAL OF THESE SLIDES.

OUR, UM, PAYING AGENT REGIONS BANK HAS DONE AN EXCELLENT JOB.

OBVIOUSLY SWBC IS THE WINNING BIDDER.

UH, THANK YOU TOWN COUNCIL AND THIS COMMITTEE FOR YOUR GUIDANCE, UH, THROUGHOUT THIS PROCESS.

THANKS TO MARK ORLANDO, DAVE BIRD, AND THE ENTIRE FINANCE TEAM.

I'M HAPPY TO TAKE ANY QUESTIONS.

OKAY, MS. TONER, UH, NO QUESTIONS, BUT, UM, I WOULD LIKE TO, UH, RECOGNIZE THE FACT THAT BECAUSE OF OUR GOOD FINANCIAL STEWARDSHIP, WE ARE ABLE TO BORROW MONEY AT A SIGNIFICANTLY LOWER RATE.

AND SO IT'S QUITE IMPRESSIVE THE RATE THAT WE WERE ABLE TO SELECT THROUGH THIS PROCESS, AS WELL

[01:00:01]

UM, IT REALLY SAYS A LOT MM-HMM .

ABOUT, UH, HOW PEOPLE SEE OUR TOWN AND OUR FINANCIAL SECURITY.

AND, UM, I ALSO FOUND IT INTERESTING, UM, HOW MOODY'S SCORES US.

AND AS YOU SAID, THE, UM, THE ITEMS THAT WE CONTROL, WHICH IS 90% OF THE SCORING ARE ALL EXCELLENT IN AAA, AND THERE'S A LOT OF ROOM, UH, WITHIN THAT MM-HMM .

BECAUSE WE'RE EXCEEDING THOSE LEVELS BY QUITE A BIT.

SO IT IS, IT'S A TESTAMENT, UH, TO, UH, THE FINANCIAL STEWARDSHIP OF THIS TOWN.

AND, UH, I JUST WANNA THANK EVERYBODY FOR THAT.

NOTHING, MR. ALFORD.

MR. MCGOWAN, THANK YOU VERY MUCH.

UH, GREAT REPORT AND GREAT, THANK YOU.

AS WE BRING SUCH LARGE CROWDS TO THIS MEETING, IS ANYONE SIGNED UP FOR PUBLIC COMMENT ON NON-AG AGENDA ITEMS? OKAY.

SEEING THEN WE WILL BRING IT BACK TO THE DAAS.

I KNOW THAT MR. ALFRED'S PROBABLY ANXIOUS TO GET OUTTA HERE SINCE HE'S ON DOUBLE DUTY TODAY.

UM, THANK YOU FOR BEING HERE, MS. BRYSON'S ABSENCE, IF THERE'S NO FURTHER BUSINESS, WE'LL FIND OURSELVES ADJOURNED.